US Streaming Market Grows, but Subscribers Plan to Cut Back
Almost half of subscribers plan to cancel one or more subscriptions within the next twleve months, however, streamers can fall back on other commercial levers such as ad-supported plans to drive growth.
[Boston, July 17, 2024] – Simon-Kucher, a leading global growth consultancy, has released its 2024 Global Streaming Study. Showing increased screentime for paid content and more subscriptions per user, the study finds that the US streaming market remains strong. Despite this there are clear headwinds, including ‘subscription fatigue’ and growing competition from social media content.
“Subscription fatigue is a growing phenomenon among US subscribers, with 42 percent planning to cancel at least one subscription in the next year and more than half of those planning to do so for content-related reasons. The message is clear: providers need to win over audiences by offering unique content, while simultaneously exploring commercial levers to drive revenue, such as bundling and ad-supported plans.” Michelle Verwest, Partner of Technology, Media & Telecom at Simon-Kucher.
Key Findings:
Growth Trends:
- The US streaming market is still expanding. Paid subscriptions now account for 51 percent of streaming time. This is up by eleven percentage points from last year. Use of free online services has decreased by three percentage points.
- 42 percent of subscribers plan to cancel at least one subscription in the next 12 months. More than half of respondents who intend to churn indicated a content-related reason.
Social Media Impact:
- 37 percent of respondents replaced potential streaming time with social media. This rises to 52 percent among 18 – 39-year-olds.
- When it comes to the appeal of social media, short-form content is a big competitor -- 42 percent of respondents say they find it as entertaining as streaming series/movies.
Subscription Dynamics:
- The average number of streaming subscriptions per person rose from 3.2 to 3.6. Part of this rise is likely the result of password-sharing restrictions implemented by major players like Netflix and Disney+.
- ‘Subscription fatigue’ is significant, as 45 percent of subscribers feel that they have too many subscriptions.
Commercial Levers:
- There has been significant growth in the number of subscribers on ad supported packages, and there is scope to optimize how advertising is served to subscribers on these packs. Additionally, ad supported packages remain an effective lever to prevent churn of price sensitive subscribers, even more so when advertisements are personalized.
- Bundling streaming services is an effective strategy given the high proportion of subscribers who plan to cancel at least one subscription within the next 12 months.
“The streaming landscape is continuously evolving, and content remains the primary differentiator,” added Jaeger. “Providers must strategically adapt to these trends. They need robust content offerings capitalizing on new commercial levers to stay competitive and cater to shifting consumer preferences.”
Complete study findings are available upon request, including country splits.
*About the Study: The Global Streaming Study 2024 was conducted April - May 2024 by the global consultancy Simon-Kucher. More than 12,000 consumers from across 12 countries (Australia, Brazil, China, Germany, Japan, Mexico, Netherlands, Singapore, Spain, Sweden, UK, US) were surveyed on their streaming behaviors and preferences.
For further information, please contact:
Niki Irby
niki.irby@simon-kucher.com
About Simon-Kucher
Simon-Kucher is a global consultancy with more than 2,000 employees in 30 countries. Our sole focus is on unlocking better growth that drives measurable revenue and profit for our clients. We achieve this by optimizing every lever of their commercial strategy – product, price, innovation, marketing, and sales – based on deep insights into what customers want and value. With 37 years of experience in monetization topics of all kinds, we are regarded as the world’s leading pricing and growth specialist.